Frequently Asked Questions
Get answers to commonly asked mortgage questions regarding loan programs and applications, rates and other information related to the mortgage process. Unable to find what you are looking for? Please contact us, we’re here to help and are ready to assist with any of your questions.
What mortgage options does First Centennial Mortgage offer?
First Centennial Mortgage offers many competitive loan programs and options, including:
- Fixed and Adjustable Rates
- FHA, VA, and USDA Loans
- Jumbo and Conforming Loans
- Conventional Financing
- Renovation Loans
- Float Down Option
Should I get a loan with a fixed or adjustable interest rate?
This will depend on how long you plan to live in your home. Think about a fixed-rate mortgage if you plan to live in your home for more than a few years. This will provide you with stable payments and protection against increasing mortgage interest rates. While an adjustable-rate mortgage would be more suitable for you if you foresee living in your home for only a few years. With an adjustable-rate mortgage, you open yourself up to the possibility of having your monthly payments increase or decrease each time your interest rate changes.
How do I know which loan program is best for me?
Your lifestyle and financial situation are the best guides for deciding on the best loan program for you. Consider these questions:
- How long do you plan to live in this home? Several years, or just a few?
- Do you anticipate your income or finances to significantly change over the next few years?
- Do you prefer your monthly mortgage payment to be consistent or possibly adjust over time?
- Do you plan to be out of mortgage debt by a certain milestone, such as when your children start college or when you retire?
Based on your answers, your First Centennial Mortgage loan officer can discuss different home loan programs that will suit you financially and help you reach life’s milestones.
What is the difference between a VA and an FHA loan?
A VA loan is guaranteed by Department of Veterans Affairs. This loan is a great benefit to military personnel during and after their service, and offers no down payment, higher loan value and no PMI. FHA loans are guaranteed by the Federal Housing Administration. FHA is a government agency that works with approved lenders such as First Centennial Mortgage. These loans are ideal for people with limited income or money for a down payment; typically, first-time homebuyers, seniors or others with limits on what they can afford.
What is a pre-qualification letter, and why should I have one?
A pre-qualification letter evaluates your credit worthiness to determine the estimated amount you can afford to borrow. Pre-qualification is a quick and easy process of examining your income and expenses to help you set realistic goals while you’re house hunting and can provide you with the same negotiating ability as a cash buyer. It also enables you to move quickly once you find the perfect home.
Should I go through the pre-qualification process before I begin searching for a home?
Definitely. If your credit score and finances are already in order prior to your house hunt, the process will go very smoothly. The pre-qualification process is simple:
- Meet with your First Centennial Mortgage loan officer to find out what documents will help you become pre-qualified.
- Your First Centennial Mortgage loan officer will pull your credit report and evaluate your financial documents. With this information, you and your loan officer will be able to discuss the best home financing options to help you achieve your financial and homeownership goals.
- Once you are pre-qualified, you will receive a pre-qualification letter to inform your real estate professional and the seller of the property that you’re a preferred and serious potential buyer. This will give more weight to any offer you extend on a property as well as allow you to relax and enjoy the process of looking for your new home.
Do I have to pay for the pre-qualification process?
No, it’s absolutely free. We invite you to use our website for information, to compare interest rates and terms for various loans, for pre-qualification at no charge. And if you need additional assistance, please contact us.
When I apply for a mortgage, what documents will I need?
The typical documents you’ll need are those that verify your income, employment and assets. Talk to your loan officer to find out exactly what you’ll need.
How does the annual percentage rate (APR) differ from the interest rate?
According to the Consumer Financial Protection Bureau (CFPB): “The interest rate is the cost of borrowing money expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan. An Annual Percentage Rate (APR) is a broader measure of cost to you of borrowing money. The APR reflects not only the interest rate but also the points, broker fees, and certain other charges that you have to pay to get the loan, including certain of your closing costs. For that reason, your APR is usually higher than your interest rate.”
How do I know what my interest rate will be?
Interest rates change daily. Your First Centennial Mortgage loan officer will advise you of the rates available for your specific loan product. When you are ready, you can lock in your interest rate for up to 180 days (additional restrictions and fees may apply for lock terms in excess of 90 days). This guarantees your rate for the entire lock period.
Why did I receive a Loan Estimate (LE) document?
The Loan Estimate (LE) will be provided to you within three business days of receiving your application. It tells you important details about the loan you have requested including the estimated interest rate, monthly payment and total closing costs for the loan.
Will I get a copy of my credit report and appraisal?
You may obtain a copy of your credit report through the credit bureaus. You will receive a copy of your appraisal a minimum of three days prior to your closing.
What is a loan-to-value ratio?
Your loan-to-value ratio is called LTV. You can calculate this amount by dividing your current loan amount by the total value of your home. For example, if your home is worth $220,000 and you owe $160,000, your LTV is 73%.
Will I be able to qualify for a loan even if I have past credit problems?
Yes. First Centennial Mortgage offers many home loan solutions for borrowers with credit problems. You’re not alone; everyone finds themselves in tough financial situations at one point or another. Don’t let previous problems discourage you from getting a fresh start.
What are “origination fees” in regard to my mortgage?
Origination fees are the fees required to originate the loan. They can include processing fees, underwriting fees, administrative fees, and several others. Your loan officer can give you a complete breakdown of these fees as they vary from state to state.
How much will I need for a down payment?
Depending on your financial situation and loan eligibility, we have several down payment options. Your First Centennial Mortgage loan officer will be able to help you find a loan program that best fits your financial goals and needs.
My first mortgage payment is due but I don’t have my payment slips yet. Where should I send the payment?
Refer to your “First Payment Letter” in your closing documents to determine where to send your first mortgage payment.
What does it mean to waive escrows?
When you waive escrows, you take the responsibility of paying your taxes and insurance rather than having them included in your monthly payment. Waiving escrows may add a fee to your closing costs. You can only waive escrows if your loan program allows for this.
Will I have two separate payments if I have a second lien?
The second lien is often from a different lender than the first lien (or loan). Borrowers with a second lien, therefore, will make two separate payments each month – one on the first lien and one on the second lien.